The African Export-Import Bank (Afreximbank)and Heirs Energies Limited have partnered on a US$750-million financing deal designed to optimise Heirs Energy’s capital structure and unlock critical liquidity to support its working capital requirement as it pursues its ambitious field development programme.
The investment deal is expected to significantly impact Nigeria’s domestic energy capacity positively as demand for electricity and other energy products continue to surge on a daily basis.
While the President and Chairman of the Board of Directors of Afreximbank, Dr. George Elombi, signed the partnership agreement on behalf of the bank, Chairman of Heirs Energies Limited, Mr. Tony Elumelu, signed for his company.
A news report from African Press Organisation (APO) Group circulated on behalf of the merchandize trade lender, indicated that the dual-tranche senior secured reserve-based lending facility was concluded during a ceremony in Abuja.
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The facility is expected to support Heirs Energies’ accelerated growth strategy as the company enters a new phase of expansion seeking to increase, and sustain, its oil and gas production.
According to the online news medium, Afreximbank is appointed the Mandated Lead Arranger, Facility Agent, and Security Agent under the financing which is seen as an important milestone in strategic collaboration between Afreximbank and Heirs Energies.
Speaking during the signing of the pact, Afreximbank President described the partnership as a testament to bank’s commitment to value creation and the empowerment of African entrepreneurs.
He said: “Without investments, such as the one being provided to Heirs Energies, many fossil fuel-dependent African economies would face dire economic challenges. Our aim, among others, is to empower the African entrepreneur. Our core strength is in the value of the partnerships we continue to forge.”
Elombi commended Elumelu’s support for Afreximbank’s activities, adding that such partnerships have been instrumental in helping position the bank in unlocking Africa’s economic transformation and other goals.
He reaffirmed Afreximbank’s determination to see the African Energy Bank project to fruition, saying that “we should get to higher strides and get the Energy Bank so we can move most of the energy portfolio there. We will put tremendous capital in it to be as bold and as innovative as Afreximbank”.
In addition, the banker assured that Afreximbank was willing to work with Heirs Holdings and its affiliated companies expand to other West African countries such as Ghana and Côte d’Ivoire, and to other parts of the continent, stressing that “our aim is to spread and support the domination of the African brand across Africa.”
Commenting on the transaction, Elumelu, enthused: “This transaction is a powerful affirmation of what African enterprise can achieve when backed by disciplined execution and long-term African capital. It reflects the successful journey Heirs Energies has taken – from turnaround to growth – and reinforces our belief in African capital working for African businesses. This is Africa financing Africa’s future.”
It would be recalled that the partnership between Afreximbank and Heirs Energies Limited dated back to 2021, when the company, then known as Heirs Oil & Gas, completed its acquisition of a 45-per cent participating interest in the OML 17 Joint Venture with a US$ 1.1-billion transaction financed by a consortium of international and local banks led by Afreximbank, marking one of the most significant indigenous energy acquisitions in Nigeria’s oil and gas sector.
Afreximbank participated with up to US$250 million of that financing, underscoring its commitment to Africa’s energy sector development and its mandate to promote intra-African trade and the growth of African-owned enterprises.
Since that acquisition, Heris oil and Gas crude oil production has increased from approximately 25,000 barrels per day to an average of 50,000 barrels per day, aside the associated and non-associated gas production.
Also, the company achieved first gas from the Agbada Non-Associated Gas Plant on 21 November 2021, just months after taking over the asset which had been under construction for over 10 years under the previous operator.
